Late Friday afternoon, Clinical Data (CLDA) received news from the FDA that Viibryd (vilazodone HCl tablets) had been approved for patients with major depressive disorder. This is overwhelmingly positive news for the bulls of CLDA, but also for the whole biotech industry. It’s important to see a typically conservative regulator willing to approved a drug the first time through. This drug enters a market where 50% of patients are dissatisfied with current treatment options, which accounted for $10 billion in sales. Viibryd has serious potential to generate significant revenue, especially something a large pharma with a dedicated sales team might be interested in order to protect future revenues beyond 2011.
The significance of this news and the recent failure at Forest Labs (FRX) have materially effected their value to soon to be new highs. We still continue to hear that a deal to acquire them is in the works, approval upped the interest to four other parties. Investors should consider that the notable biotech investor and Chairman of the Board at CLDA, Randal J. Kirk, owns around 11 million shares (or 36% of O/S). His style is to make very concentrated positions in good companies and take control. Consider that in 1993, he founded King Pharmaceuticals, which Pfizer (PFE) recently acquired in 2010. In 2007, Kirk sold New River Pharmaceuticals to Shire (SHPGY) for $2.7 billion. His cut was $1.2 billion. During the conference call, President and CEO Drew Fromkin, confirmed that the company was in serious discussions with interested parties possibly for a change of control transaction. They have had significant interest in their product and they need to explore the best potential deal. We believe that Randal Kirk will be able to sign a deal here soon.
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